July 11, 2014

Apple's iPhone 6 ramp up Rocks Taiwan's Component Market

Yesterday Taiwan's Business Weekly reported that Apple's iPhone 6 will save Taiwan, not only its lifeless technology industry, but also save the Taiwan stock market because of the orders for the iPhone 6 and its various components. Their forecast for Apple's iPhone 6 is estimated as 68 million units in the first round of orders which is about a 50% leap over orders for the iPhone 5. Today, there's more news out of Taiwan describing the impact that the production of the iPhone 6 is having on component suppliers.

Last week we reported that Hon Hai plans to hire 100,000 production workers for the iPhone 6 in order to keep it on schedule. In contrast Samsung had stated on Wednesday that they would be cutting their Galaxy S5 orders because of their inventory backlog in light of their operating profit plummeting 24% for Q2.

So with Samsung's orders diminishing and Apple's orders wildly expanding you can understand why the iPhone 6 ramping up is saving Taiwan economy.

Today, DigiTimes is reporting that "Smartphone vendors that are looking to release new high-end models in the second half of 2014 are worried about getting access to enough component supplies as many component makers are preparing orders for Apple's new iPhone, according to sources from the upstream supply chain.

In addition, non-Apple vendors have delayed the launches of their new smartphones to a later time in 2014 to avoid direct competition against the new iPhones, the sources noted.

Consumers delaying their purchases of a new smartphone to include upcoming iPhones as one of their options may impact non-Apple vendors' smartphone sales by 10-20%, the sources said.

The sources pointed out that non-Apple vendors may remain conservative prior to the end of the third quarter, when the new iPhones should become fully available, and related specifications become clear, and they will then launch a new wave of smartphones and marketing attacks to gain back market share."

Apple is simply rocking the entire smartphone ecosystem in Taiwan which is the largest smartphone production hub in the world. It's as if Godzilla just came to their shores and there's no use fighting it. When Godzilla leaves, Android OEM's will quickly try to catch up.

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